The timing of the first milestone payment for Orum Therapeutics' antibody-degrader conjugate (DAC) pipeline "ORM-6151" is drawing market attention. It is cited as a key variable for the company to meet its goal of turning a profit within the year.
Development of ORM-6151 is on track, with partner Bristol Myers Squibb (BMS) expanding the size of the global phase 1 trial, but interpretations differ over when the actual milestone will flow in. Lee Sung-joo, CEO of Orum Therapeutics, said at the shareholders' meeting on Mar. 3, "Because of confidentiality clauses, it is hard to disclose specific terms, but given the transaction structure, the milestone could come in early."
Orum Therapeutics out-licensed the candidate to BMS in 2023 in a deal worth about 244.2 billion won and received about 135 billion won as an upfront payment at the time. The company previously estimated the first development milestone at about 40.3 billion won.
◇ Changed trial design: When is the first milestone
According to the U.S. National Institutes of Health (NIH) clinical registry site (ClinicalTrials.gov), in June last year the trial design expanded from two dosing arms to three arms. A triple-combination arm with azacitidine and venetoclax was added to the monotherapy and the double-combination with azacitidine.
The number of trial sites also increased. Three sites in France and one site in Barcelona, Spain, were added. In Apr. this year, one site in Seville, Spain, was also added.
Some suggest the timing for determining the recommended phase 2 dose (RP2D) could coincide with the milestone payment. RP2D is the stage in early trials where the dose for phase 2 entry is set based on safety and efficacy signals, and it is sometimes used as a milestone payment criterion in licensing agreements.
Currently, the registry lists the RP2D assessment period as up to two years. Although the ORM-6151 trial began in May 2024, the first patient dosing reportedly took place around Nov. of the same year, leading the industry to expect RP2D could be determined soon.
Interpretations differ on the timing. A chief scientific officer (CSO) at a Korean pharmaceutical company said, "The meaning and timing of RP2D change depending on how phase 2 is designed," adding, "If a new combination cohort was added, the trial design itself would need to be restructured, which could delay RP2D finalization."
By contrast, a clinical manager at a Korean biotech said, "Since evaluations proceed stepwise from the dose confirmed in monotherapy to double and then triple combinations, adding more arms does not seem likely to delay RP2D determination itself."
There is also analysis that more time may be needed because the number of trial sites increased. Another clinical manager at a Korean biotech said, "When the number of participating sites and patients expands, it generally takes more time for patient recruitment and data accumulation," adding, "For rare cancers, recruiting patients is not easy."
In fact, of the newly added sites, two in Spain are recruiting subjects, while the sites in France have not yet started recruitment. The ORM-6151 trial targets patients with relapsed or refractory acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS), which are rare hematologic cancers.
The type of RP2D is also key. A CEO at a Korean biotech with out-licensing experience said, "RP2D is derived separately for monotherapy, double combination, and triple combination," adding, "Depending on which regimen's RP2D is used as the contractual criterion, the actual milestone timing may differ."
Regarding this, Orum Therapeutics said, "The increase in trial sites is a positive signal for efficacy," adding, "Given that the primary completion date of phase 1 is expected to be in Feb. next year, there is potential to determine RP2D within the year."
On the increase in arms, the company said, "Recently, to shorten overall trial timelines, more cases are running phase 1 and phase 2 in parallel," adding, "While we cannot know for sure since BMS leads the trial, the addition of the triple-combination arm to the design may be for that reason."
◇ Results gap persists: First-quarter revenue at 0 won
Orum Therapeutics posted consolidated first-quarter revenue of 0 won and an operating loss of 18.1 billion won this year. With research and development expenses continuing, the deficit widened from the same period a year earlier (operating loss of 9.6 billion won).
In the securities registration statement submitted for a KOSDAQ listing, the company projected it would return to profit this year, with annual consolidated revenue of 75.2 billion won and operating profit of 31.5 billion won. The projection reflected the assumption that the ORM-6151 milestone (about 40.3 billion won) and a milestone related to the U.S. Vertex Pharmaceuticals deal (about 23.5 billion won) would occur within the year.
In 2024, Orum Therapeutics exported its targeted protein degrader (TPD) platform technology to Vertex. The deal is worth up to 1.3 trillion won, and the company received about 20.8 billion won as an upfront payment at the time.
However, the first milestone related to Vertex (13.5 billion won) that the company reflected in the securities registration statement was not recognized last year, and the follow-up milestone expected this year has not yet occurred.
On this, Orum Therapeutics said, "Turning a profit in the short term is important, but we are currently focused on developing follow-up pipelines and generating additional out-licensing results." Early this year, the company secured 145 billion won in liquidity by issuing convertible preferred stock (CPS).
The company said, "Including the BMS upfront payment, we have secured about 280 billion won in cash, so we see no major obstacles to continuing research and development for the next three to four years," adding, "There are no additional financing plans yet."
◇ Reappraising platform value: Could this be an opportunity for Orum Therapeutics
Apart from the short-term milestone timing, the expansion of the ORM-6151 trial itself is seen as a sign demonstrating the competitiveness of Orum Therapeutics' DAC platform.
Global big pharmas are accelerating their push to secure DAC platforms. Last month, Johnson & Johnson (J&J) acquired Firefly Bio, a U.S.-based biotech specializing in DAC platforms, in a $1 billion (about 1.5 trillion won) deal. This is why there are expectations that clinical results from ORM-6151, developed with Orum Therapeutics' own platform, could tie into the value of the company's follow-up pipelines.
The company plans to verify its platform capabilities through ORM-6151 and then proceed with developing follow-up pipelines "ORM-1153" and "ORM-1023."
The company said, "Even before clinical entry, if we receive a proposal on appropriate terms for ORM-1153, we could consider out-licensing," adding, "We are leaving room for various deal structures, including option deals." It added, "For ORM-1023, we plan to finalize the development candidate within the year, and in the first half of next year, we also plan to select a candidate based on a new payload."